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Plasma revenues to peak in 2008, iSuppli says

Revenue from the sale of plasma display panels (PDP) will increase to $8.6 billion in 2007, up 11.8 percent from $7.7 billion last year, according to a report from market researcher iSuppli.

According to Riddhi Patel, iSuppli principal analyst for TV systems and author of “LG, Samsung SDI Boost Market Shares in Q1 PDP Arena,” the PDP market experienced a tightening in the supply of panels in the first quarter; yet, despite the tightness, average selling prices for the displays declined in the face of intense competition from LCD panels in the consumer and business markets.

The researcher is forecasting that annual PDP revenue will peak in 2008 at $10.2 billion, up 18.5 percent from 2007, because of increased production of 50in and larger sizes. Growing competition and continuous price pressure, however, will trigger revenue contraction to $8.7 billion by 2011.

Several factors are driving the decline in average selling prices for plasma displays, including:

Increased competition that is forcing panel makers to reduce prices — even amid the tight supply situation seen in the first quarter;

The market appears more attractive from a unit perspective with shipments reaching 23.6 million units by 2011 — a compound annual growth rate of 18.6 percent from 10 million in 2006, according to iSuppli.